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GIBRALTARp8 Funds p10 Insurance Nov/Dec/Jan 2011/12 INTERNATIONAL

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Gibraltar Day in London: Pushing for new City business

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DELOITTE ISOLAS / FIDUCIARY GROUP Tel: + (350) 200 41200 • Fax + (350) 200 41201 Tel: + (350) 200 78363 www.deloitte.gi Tel: + (350) 200 76651 www.gibraltarlawyers.com EUROPA TRUST COMPANY LIMITED www.fiduciarygroup.com Tel: + (350) 200 79013 • Fax + (350) 200 70101 www.europa.gi QUEST INSURANCE MANAGEMENT LTD. Tel: + (350) 200 74570 • Fax + (350) 200 40901 INVESTGIBRALTAR OFFICE www.quest.gi Tel: + (350) 200 52634 • Fax + (350) 200 52635 www.investgibraltar.gov.gi BARCLAYS WEALTH Tel: + (350) 200 41222 MONARCH AIRLINES www.barclayswealth.com Tel: + 44 (0)8700 405040 • Tel: + (350) 200 47477 www.monarch.co.uk www.flymonarch.com GIBTELECOM Tel: + (350) 200 52200 • Fax: + (350) 200 71673 HASSANS www.gibtele.com Tel: + (350) 200 79000 • Fax + (350) 200 71966 www.gibraltarlaw.com KPMG Tel: + (350) 200 48600 • Fax: + (350) 200 49554 GRANT THORNTON www.kpmg.gi Tel: + (350) 200 45502 / Fax: + (350) 200 51071 www.grantthornton.gi SAPPHIRE NETWORKS Tel: + (350) 200 47200 • Fax + (350) 200 47272 BAKER TILLY (GIBRALTAR) LTD www.sapphire.gi Tel: + (350) 200 74015 • Fax: + (350) 200 74016 www.bakertillygibraltar.gi TRIAY & TRIAY Tel: + (350) 200 72020 PIRANHA DESIGNS www.triay.com Tel: + (350) 200 45599 • Fax + (350) 200 52037 www.pdg.gi LOMBARD ODIER DARIER HENTSCH PRIVATE BANK LTD HILL INSURANCE COMPANY LIMITED Tel: + (350) 200 73350 • Fax: + (350) 200 73475 Tel and Fax: + (350) 200 62407 www.lombardodier.com www.hillinsurance.eu COMPUTACENTER GIBRALTAR FUNDS & INVESTMENT ASSOCIATION Tel: + 44 (0)1707 631 000 (GFIA) www.computacenter.com Tel: + (350) 200 64740 www.gfia.gi

www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 3 Nov/Dec/Jan 2011/12 EDITORIAL COMMENT Volume 17/ Number 4 Pre-election: progress being made here’s a great air of expectancy with a Gibraltar general election looming within the next few weeks. The new airport terminal will open shortly before the Thustings begin – at least that’s the plan if it’s not still Contents further delayed. Work on two new hotels gets under way early next year and also the lack of speculatively built, modern open-plan office space looks to be resolved – at least NEWS p6 for the immediate future – with the start of work on the World Trade Centre building next year, after agreements Gibraltar Day–Pushing for new City business have been signed with Ocean Village. And the Government is saved from defending its FUNDS p8 threatened pump priming financial intervention to solve the lack of office space for financial service businesses seeking to Modernised Experienced Investor Funds Regime relocate to the jurisdiction. Ready for the Future Anyone might think Christmas had come early! Certainly it is all very conveniently, if finely timed for Chief INSURANCE p10 Minister Peter Caruana to add these developments to a list of achievements during his 15-year tenure. Capital ‘cliffhanger’ overshadows business gains But for the second successive time, this election looks as though it might be a close-run thing with Opinion Polls BUSINESS p12 sampling the 33,000 voters to show first the ruling Gibraltar Social Democrats (GSD) with a narrow lead, then the Protect your Assets and Confidentiality: alliance between the Gibraltar Socialist Labour Party (GSLP) Corporate Structures and Trusts in Gibraltar and Liberals taking most seats. And whilst domestic social issues like housing, medical services and unemployment command greatest interest HEALTH INSURANCE p14 amongst voters, surprisingly for a relatively new A healthy option parliamentary system, democracy (or the perceived lack of it) and government public accountability appear high on the MONEY p20 agenda. What is not to the fore at this pre-Manifesto stage is any Euro exchange rate to reach 1.30 real debate or proposals that will affect the finance centre or business generally, for that matter. There are rumblings – but not for another 15 years! about unnecessary spending on capital projects – the new terminal that quadruples the space, is too expensive, too big TOURISM p24 or the existing one could have been upgraded; and work has £50m hotel boost by 2014 – more to come still to start on Gibraltar’s largest capital project, the £100m new electricity generating plant, which many regard as a higher priority than any other project. BUSINESS ROUND UP p26 More worryingly, there are some signs that Gibraltar’s finance centre may face some issues. The motor insurance sector warning that suggests businesses may be severely GIBRALTAR INTERNATIONAL MAGAZINE undercapitalised to meet EU solvency rules coming into force in 2014, is of some concern, as is the admission by Published by Gibraltar No part of this publication Caruana at the Gibraltar Day celebrations in London that International Publications Ltd. may be reproduced without G7 Cornwall's Centre the written permission of the the territory’s finance sector could be facing tough times PMB 104 publishers. ahead with continuing European economic problems. PO Box 561 The publishers have tried to His bid therefore to gain more City of London business Gibraltar ensure that all information is accurate, but emphasise that for the jurisdiction now that Gibraltar has moved to become Editor they cannot accept onshore European rather than offshore tax haven – except in [email protected] responsibility for any errors or the eye of Spain that continues to retain the negative omissions. The publishers Sales accept no responsibility for connotation for wider political reasons - is timely. [email protected] statements made by But whilst he emphasises that Gibraltar does not want contributors or for any claim to be seen as ‘predatory’, his plus points for the jurisdiction Design made in an advertisement. - including its sound, growing economy and the [email protected] government’s finance centre friendly approach – are made UK Agent: © 2011 Gibraltar International against a background of just the opposite situation in the UK Tel: 0044 (0) 1993 703560 Publications Ltd. and much of the rest of Europe! Ray Spencer

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previous Finance Centre lunch – adding: “It helps to have a government that understands Pushing for new and engages with financial services and that does not seek to blame the financial services City business community for all the woes of today.” Gibraltar has upped its game in trying to win business from the Gibraltar valued the City of London on the back of a “remarkably strong, successful financial services industry and recognized the job opportuni- and resilient economy”, based on firm but flexible regulation, low ties it creates; it was a place corporate tax, reducing personal tax and investment in education, where the government does not feel the compulsion (like in so writes Ray Spencer. many other European countries) to treat financial hief Minister, Peter place of choice for that move. ‘no’; it has to be consistent”, he services poorly.” Caruana told 370 “We regulate to EU and maintained. But whilst not attempting guests at the twelth UK standards, if not higher - “We don’t make revenue to steal work from the City of CGibraltar Day Finance but without gold plating. It is and spending decisions on the London, he pointedly noted: Centre lunch, held in the City not our job to make business basis of projected economic “In Gibraltar you will be insu- of London, that he was not a undoable or unprofitable, but it growth that may or may not lated from some of the vitriol to salesman, but he was “looking is our job to allow financial materialize as some countries which you are exposed here in for business partners that share services to be done reputably, are discovering when their the United Kingdom.” with us our core principles” – profitably and properly. ” revenue doesn’t materialize and Gibraltar is a small, inter- education of young people to their expenditure turns out to national finance centre and secure the territory’s economic Fiscal success be excessive. We spend only London remained the world’s future and protection of Gibraltar had completed a 15- what we know we are going to premier financial centre, so Gibraltar’s reputation. year journey to transform itself collect and therefore what we Caruana was “seeking to make As he explained: “One of from offshore tax haven to an can afford”, he emphasised. the City of London understand our vital economic resources is international financial services The economy had tripled that in Gibraltar it has, not just the way people think of us. We jurisdiction within the EU. It in size to £1bn in the last 15 a political partner, but also an don’t have raw materials, we had done so by removing years; it grew last year by 6.5 economic partner; a finance don’t have land resources - we offshore zero tax company sta- per cent and this year it will be centre that has the same don’t have any of the things tus and reducing onshore com- “a minimum of 5 per cent in ideological position as the City that other countries rely on for pany taxes so that all compa- spite of what is going on in the on a global perspective and it is their economic cache.” nies now paid just 10 per cent world around us”, Caruana in Europe. But Gibraltar offered an tax. The policy had proved a maintained. economically and fiscally suc- fiscal success, he declared. Repeatedly, Gibraltar had Reputation protected cessful, stable base, and was a “On the basis of the first produced budget surpluses of “If there is business to be well regulated location, half year take - from companies slightly higher than 3 per cent relocated from the City of Caruana said, and he chal- paying on account half of what of Gross Domestic Product London for organizational or lenged: “You will be hard- they think the full year (GDP), and enjoyed “a remark- other reasons, then Gibraltar is pressed to find many territories commitment will be - we have ably low level of public debt at an ideal choice”, he main- that share some of these things, increased our yield in 25 per cent of GDP - critically, tained, and it was “a much but I don’t think you will find a Corporation Tax by just over we never borrow money for better place to relocate than single one that has all of them 30 per cent”, Caruana revealed. recurrent expenditure”. some other, more wide-flung and that’s our remarkable The new rate of Corporate Employment was still foreign jurisdiction”. offering”. Tax appealed to companies that rising and was now 60 per cent Ultimately what reputable However, Gibraltar was were “no longer interested in higher than in 1996. businesses were looking for not intent on poaching business being in countries where there when relocating, Caruana from the City. Caruana said: is no tax; it is much more Partner of choice asserted, was “a country which “This is not a predatory reputable to pay some tax, “We want the City of London attaches as much importance attempt to steal business from albeit not too much”! to see us as their partner of to its reputation, as they the City, but to come and work Gibraltar’s “extraordinari- choice, rather than as some attach to their own corporate in partnership. ly healthy economy” was made predator sniffing around to see reputations”. If business is to be relocat- possible by fiscal prudence and how we can benefit”, Caruana Personal taxation previ- ed from London, then Gibraltar fiscal health. “It is not a matter told his audience of 370 – the ously was too high and acted as wants to show why it is the of one year ‘yes’ and two years largest number than at any Continued page 16

6 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com FUNDS

it should be a seamless transition without Modernised Experienced Investor triggering a taxable event and it allows Funds Regime Ready for the Future established managers to maintain their track record. Gibraltar is one of the EU Finance by Adrian Hogg, Director, Grant Thornton, Gibraltar Group of Companies Centres that has many of the characteristics of traditional offshore fund centres, including n 5 August 2005 with the with the Protected Cell Companies Act 2001 tax neutrality, no restrictions on investments introduction of the Financial (PCC Act), be established as a protected cell or leverage and speed to market. Services (Experienced Investor company. In accordance with the PCC Act a Funds) Regulations, 2005 (EIF protected cell company may create one or Finalised amendments O more cells for the purpose of protecting and The soon to be finalised amendments to Regulations) Gibraltar laid the foundation for an extremely versatile way of setting up a fund segregating cellular assets from non-cellular the EIF Regulations (Amended EIF within the European Union. assets and keep each cell separate and Regulations) fully addresses the re- Experienced investor funds are designed separately identifiable from other cells. domiciliation quandary as the Amended EIF for High Net Worth or experienced investors. Protected cell companies can be used to create Regulations introduces a new classification of The EIF Regulations define experienced multi-cell funds or “umbrella funds”. experienced investor, whereby those partici- investors as those investors whose normal With such versatility and flexibility the pants of a fund that has re-domiciled to business activity includes investment related regime has grown from its inception during Gibraltar, where the Authority has permitted activity, those who have a net worth in August 2005 to current date with in region of the inclusion of such participants either in excess of €1 million (excluding principal 200 funds (if the cells of the experienced respect of a specific fund or generally in private residence) or those who invest a mini- investor funds that have been established as respect of a category of funds will be deemed mum of €100,000 in an experienced investor protected cell companies are taken into to be experienced investors. fund. consideration). This new category of experienced Marketing of experienced investor funds Building on the momentum of recent investor is required due to the potential must be restricted to investors who are years the Gibraltar Funds & Investments mismatch between the minimum investment deemed to be “experienced investors”. Association (GFIA) along with the FSC and amount of an experienced investor fund and Experienced investor funds must have at least the Finance Centre has undertaken an exercise that of a foreign jurisdiction. The soon to two Gibraltar resident directors who are to modernise the experienced investor funds come into force new category of “re- pre-approved by the Financial Services regime. Such modernisation is needed in domiciliation” experienced investor addresses Commission (FSC) to act as directors of expe- order to keep pace with the requirements of this problem and removes one of the major rienced investor funds, a Gibraltar licensed the modern world and to ensure that barriers to re-domiciliation. fund administrator and a depositary. The Gibraltar has relevant legislation in order to In further support of the modernisation fund’s investments can be managed by an meet such needs. and increased flexibility of the regime, is that investment manager or the funds can be “self- the Amended EIF Regulations will permit managed” by the directors of the fund (i.e. AFIMD administrators of experienced investor funds without the need of an appointed investment The European Parliament adopted the to be located outside of Gibraltar. In the manager). Alternative Investment Fund Managers current regime, as set out above, experienced The EIF Regulations require that the Directive (AFIMD or the Directive) on 11 investor funds must appoint a Gibraltar fund’s investment activities be stated in the November 2010. AFIMD contains new licensed fund administrator. Many perceive fund’s offering document. Disclosure is rules on the marketing of alternative that the current regime, limiting the required in respect of a fund’s investment investment funds in the EU by both European administration of an experienced investor objective and strategies including its approach and non-European managers, it also lays fund to Gibraltar licensed fund administra- to borrowing and gearing, and any applicable down rules for the marketing of those funds to tors, is a limiting factor to Gibraltar’s growth investment or borrowing restrictions. It does professional investors within the EU. On the as a fund’s domicile. Removing this restric- not, however, provide guidance as to how the 1 July 2011 the Directive was published in the tion via the Amended EIF Regulations will investment activities of the fund should be set, Official Journal of the European Union. provide Gibraltar with a further platform of nor what type of activity the fund may Much uncertainty surrounded the Directive as opportunity to grow. undertake. This leads to an extremely flexible it evolved considerably over the past 18 Other factors in the modernisation of the product whereby funds may be open or months prior to its adoption. However, now regime, include additional disclosure require- closed-ended, have varying investment that consensus has been reached, the alterna- ments for fund’s offering document and objectives and strategies, gearing and restric- tive investment fund community can prepare clearer definitions as to the roles and require- tions. Experienced investor funds are, as such, for its implementation in 2013 in earnest. At ments of the fund’s depositary, which all serve used in respect of a diverse investment spec- time of print, most funds marketed in the EU to modernise the regime and make it relevant trum from traditional “trading” funds are domiciled outside of the EU (in and fit for purpose for the coming years. (trading in equities, bonds, foreign exchange, jurisdictions such as the Cayman Islands and It is widely expected that AFIMD will commodities, derivatives and such like) to the British Virgin Islands). create a fundamental change in the interna- property funds, private equity funds and For those that market funds in the EU tional funds industry, whereby funds that are special situation funds. AFIMD provides the quandary of whether or marketed in the EU are domiciled in the EU. not to keep the fund in a domicile outside of Gibraltar, with the modernisation of its PCC’s the EU, re-domicile existing funds to the EU experienced investor funds regime, is ready for A further facet of the flexibility of experienced or to create funds afresh in the EU. Re- the change. investor funds is that they may, in accordance domiciliation is often the method of choice as www.grantthornton.gi

8 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com INSURANCE Capital ‘cliffhanger’ overshadows business gains More motor insurance business is now written by support services and the Regulator, so it’s an attractive choice within the EU, he Gibraltar-based firms than by Lloyd’s of London! And the maintains. local insurers are significantly more profitable than their “With the advent of the 10 per cent UK counterparts. That’s the good news, finds Ray Corporation Tax rate for all business, there Spencer, but most of Gibraltar’s motor insurers may have is now tax certainty, which has only assisted in making that Gibraltar decision.” a looming problem ahead. Insurers may pay even less tax as they ew EU rules – Solvency II - And he noted: “All in all, it’s very good are allowed to exclude interest on income require insurance companies news for the Gibraltar market.” arising from insurance premiums in their to have greater capital and Admiral Insurance, which writes most tax calculations! Nrisk management standards of its UK business in Gibraltar since Most new business has come from UK by 2014 and “the majority of Gibraltar’s moving to the jurisdiction in 2002, is representative offices in London – the City motor insurers are currently undercapi- credited with being the star performer both is still the key source of new opportunities. talised to meet the new requirements,” by Deloitte and by fellow accountancy believes Ian Clark, a London partner firm, Ernst & Young (E&Y), which made Gibraltar Motor specialising in insurance for Deloitte, the the Gibraltar comparison with Lloyds in its Gross & Net Written Premiums international accountant! summer motor insurance briefing. He thinks these firms “may have to significantly increase the amount of capital Fresh interest in their businesses - if they want to contin- A 10 per cent growth in UK motor business ue trading the same volume of business in has come about, because insurance two year’s time - or reduce the volume of premiums have risen significantly (45% in business they are writing.” the past year according to E&Y, although it As Clark put it: “Something’s got to may now be peaking). And that’s sparked give”. The Gibraltar firms, he suggested, fresh interest from investors. could also turn more to use of reinsurers to BTG Pactual, the largest Brazilian alleviate their capital strain. investment bank, plans initially to write UK At two Gibraltar industry presenta- motor insurance in a new joint underwrit- tions in October, Clark emphasised the ing venture with Premier Group, a client of implication: “Gibraltar is standing on a Quest Group in Gibraltar. Source: Deloitte London cliff edge; it has to do something, the status Quest gained 50 per cent more clients quo is not enough.” last year, and managing director, Steve That depressing view however, was in Quinn, expects “further significant Some jurisdictions such as Guernsey sharp contrast to his assessment of the growth” – around a third more – in the (where there are a large number of present situation. next 12 months. “We are seeing well- insurance captives) have decided not to go The jurisdiction’s motor business known names in the global insurance for Solvency II equivalence, and large accounted for £1.5bn (around 10 per cent industry viewing Gibraltar as a viable companies are now said to be considering and growing) of the UK motor insurance jurisdiction in which to establish the need to move to an EU base. market last year; in 2009 it stood at operations”, he said. According to Gibraltar's Bruno £1.2bn, with a 9 per cent share. Earlier this year, through Quest, the Callaghan, local director for Willis New York Stock exchange listed company, Insurance, which manages ten multination- More profitable Transatlantic Re-insurance, set up Calpe al insurers, some being captives: “By virtue “Gibraltar motor insurers are more Insurance Company, to specialise in of the worldwide economic situation, profitable than those in the UK by some co-insurance and spreading risk for almost everything is on hold. margin”, he reported, given a lower primary insurers. “However we are working on a expense base and more profitable Quinn says he’s working on three number of insurance prospects - one from underwriting. other prospects – all listed on NASDAC beyond Europe that is quite large - that we “In an industry that is losing money, and offering a mix of UK personal lines expect to come to fruition early next year.” many of the Gibraltar insurers are making insurance. Callaghan added: “The new 10 per money, as well as writing to a better claims “Some global players now feel com- cent Corporation Tax for all Gibraltar loss ratio than the UK insurers,” Clark fortable with Gibraltar’s offering. It’s a said. good place to operate with easy access to Continued page 18

10 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com BUSINESS Protect your Assets and Confidentiality: Corporate Structures and Trusts in Gibraltar By Mark Jason Bridge B.Juris; LL.B; LL.M Director and l Intellectual property rights General Manager at Europa Trust Company Limited (Gibraltar) Trusts, on the other hand, are an effective way of transferring wealth from ibraltar is a popular financial applies across the board on income accrued one generation to another. The essence of a destination for an eclectic mix in or derived from Gibraltar. trust is to separate asset ownership from of international executives, The Organisation of Economic control. This approach safeguards the Gauthors, sportsmen, corpora- Corporation and Development’s (OECD) assets and their intended purpose. Assets tions, individuals, families and many crackdown has been generally positive for included in a trust can take many forms others, who want to achieve their financial Gibraltar. At the end of 2009, Gibraltar including cash, real estate, securities and and business objectives while guarding signed the required twelfth Tax patents. their assets and legitimate confidentiality. Information Exchange Agreement (TIEA), There are many reasons for setting up They understand the importance of tax & which resulted in it being elevated to the a trust or a foundation and some of them succession planning and protecting their OECD ‘s “White List”. Gibraltar is now include: assets from unexpected events. seen as a “safe-haven”, allowing clients to l Efficient wealth transfer to dependents Gibraltar is self-governing through achieve their financial and business l Tax minimisation its democratically elected parliament, objectives while guarding their assets and l Asset protection however, under its Constitution matters of legitimate confidentiality. l Wealth and estate planning defence and foreign relations are the So far 17 TIEAs have been signed and l Charitable purposes responsibility of the United Kingdom. the Government has indicated a willingness l Means of controlling and administering The jurisdiction has established itself to sign a TIEA with any country wishing to property as a prosperous financial centre over the sign one. l Avoidance of will disputes last 40 years. Benefiting from a stable and The signing of the TIEAs, together The jurisdiction also offers marine growing economy and a favourable tax with the new fiscal legislation, has services. In addition to the services regime, its political stability, robust elevated Gibraltar to being a serious and provided by the modern port, vessels can commercial and professional infrastructure competitive European Financial Centre. be registered under the British flag in contribute to its attractiveness as a financial The TIEAs have enhanced Gibraltar as Gibraltar and enjoy privileges afforded by jurisdiction. a cooperative and responsible jurisdiction, such registration. The client demographic covers all four fully committed to international standards, corners of the globe and their business and removing the “tax-haven” stigma. Advantages as a Finance investment interests are likewise spread Centre across the globe, managed from Gibraltar. Services Gibraltar is part of the European Union The Jurisdiction is able to offer bespoke The most popular products or services and yet within close proximity to Africa. It company and fiduciary services at offered by Gibraltar are Trust & Company is a low tax jurisdiction; VAT Free, no competitive professional rates. formation and management (ie Special Capital Gains, Estate Duty, Wealth, Purpose Vehicles – SPVs), banking, Inheritance, Gift or other capital taxes It Legal System insurance and reinsurance, captives, fund has an International airport; excellent road The legal system is based on English management and fund administration, and sea links into Europe and Africa. Common Law with some local statute law investment services, experienced investor Trust and Company Managers must variations. As part of the European Union, funds, e-gaming and maritime services. be authorised and regulated by the Gibraltar provides easy access to the EU In recent years, there has been a Financial Services Commission (FSC). financial markets and as such is subject to particular focus on experienced investor These managers are listed on the FSC’s its directives and regulations. funds and e-gaming. New Islamic products, website http://www.fsc.gi. Trust and In December 2007, new anti-money e-gaming and hedge funds are likely to play Company Managers may voluntarily join laundering and counter-terrorist funding a more important role in future. the Association of Trust Company regulations were implemented. Corporate structures play an impor- Managers (ATCOM). These are monitored by the Financial tant role in financial planning for private The jurisdiction is not seen by Services Commission (FSC). individuals and corporate clients, particu- authorities or business counterparts as larly in the minimisation of tax liabilities, some “exotic” island in the middle of a vast Taxation confidential ownership and the protection ocean serving as a convenient jurisdiction On 1 January 2011, a new era unfolded for of assets. They can have a variety of uses for tax avoidance. It is a responsible, Gibraltar. New Fiscal legislation took effect and benefits: progressive and competitive financial cen- that includes exceptional tax statuses for l Investment and property holding tre with a stable government, established High Net-Worth Individuals and High l Ship and yacht ownership infrastructure and British legal system. Executives Possessing Specialist Skills. A l General and specific trading or Gibraltar provides a tax efficient financial new low corporation tax rate of 10% consultancy gateway into the European Union.

12 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com HEALTH INSURANCE A healthy option Tim Mutton, business development director at Now Health International discusses international private medical insurance and the important benefits it can bring to expat employees and High Net Worth residents in Gibraltar

s a regular business visitor to the Iberian Peninsula. Angela maintains Gibraltar, I confess that life on the that it’s critical for expats, in Rock often makes me envious. particular, to have private medical A Gibraltarians seems to have it insurance, she says: “the majority of our all: a splendid location, with easy access to expat clients in Gibraltar who have private Spain and North Africa, a wonderful medical insurance do so mainly for the climate, friendly, welcoming people and, same reasons as they would have in their of course, the generous tax system that native country, additional access to attracts many financial companies and specialist doctors, quick diagnosis, extra wealthy individuals. cover for the unexpected, as well as vital bers of businesses from the UK and the And the local healthcare system is cover for spouses and other family rest of Europe and their employees expect strong too. The Gibraltar Health dependents, particularly where serious relocation packages and benefits that Authority (GHA) – equivalent to the UK’s surgical intervention is required.” include giving them and their families the NHS – invests heavily in the peninsula’s most comprehensive healthcare insurance health care infrastructure. According to International health protection available in the market.” Bruno Callaghan, managing director of insurance cover Plans can differ substantially in terms Callaghan’s, one of Gibraltar’s largest bro- One of the options for overseas employ- of levels of cover provided but it’s possible kers, the GHA invests around £90m a year ees, retired expats and wealthier to take out a top-tier plan and pay less by into the system. “That works out at Gibraltarians alike – who may wish to agreeing to higher excesses (the amount around £3,000 per head of population,” refine or enhance their healthcare choices you contribute with each claim for he says. “And if you compare that, for – is to take out international health treatment). example, to the £1,200 per capita in the insurance cover. These plans typically “Typically individual clients go for Kent/Tunbridge Wells area of the UK, you provide cover for a variety of health- excesses of around £100 to bring down get a feel for the strength of medical provi- related eventualities or top-up protection the cost,” says Dawn Mchard, sion here.” for you and your family, and are director of Totus Wealth Management. Nevertheless, even for local particularly effective if you: “We find this is a particularly attractive Gibraltarians, this provision can have l travel regularly with your job, route for ‘category 2’ status individuals, limitations. Just as in the UK, they have to especially to less developed countries i.e. those with £2 million plus in assets, a face inevitable waiting lists and they are l want to choose where to be treated – for property on the Rock and who earn their not able to choose their consultant. For example, with family back in the UK, you money outside Gibraltar. These clients specialist care a consultant may need to be may feel more comfortable undergoing generally want more medical protection brought in to meet a specific need or specialist treatment there across the board.” For corporate clients, patients are taken to facilities in mainland l want to have access to a specialist clinic however, ‘nil excess’ is usually the Europe or the UK, but again waiting times for a specific course of treatment or favoured route. and a lack of choice can make the following a medical emergency Of course, choosing the right plan is arrangement far from ideal. l decide to live abroad for a period and always easier said than done but there are want a flexible medical plan plenty of good brokers and advisers based Expats l maintain and use a number of homes in in Gibraltar who can offer a variety of The situation for expatriates is even more different countries IPMI options to suit your choices. precarious. Some groups – such as non- l or are concerned about the restricted Health care, particularly if your permanent employees on contracts – only medical facilities in the country where you family is involved, should never be left to qualify for emergency services and have no are living. chance. In Gibraltar, what you decide to access to specialist treatment at all. Demand for international health do must come down to a very personal “To have private medical insurance is insurance is increasing in Gibraltar, choice and talking to a good adviser on a must for any expat, for peace of mind according to one of the leading advisers, the ground will ensure that you find the and reassurance,” says Angela Barden, Geoffrey Trew, MD of brokers, Quest right solution and don’t make costly Private Medical Sales Manager at Ibex Sovereign Insurance Services who says: mistakes. Insurance, an expat insurance specialist in “Gibraltar is attracting increasing num- (www.now-health.com)

14 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS

Continued from page 6 City and Gibraltar) are particu- And the Lord Mayor’s added: “We are confident in larly threatened and challenged representative, Sheriff Alan our culture, integrity and a disincentive to those wanting by future pressures. Yarrow concurred, saying: probity and that’s what the City to establish business in I think we face difficult “There are challenges for the and Gibraltar offer to the Gibraltar, he conceded. times again while European City of London – not just the world. But now the top personal leaders come to terms with the City but for everyone. This event celebrates the rate for senior and other execu- effect of the present financial We have faced these partnership in the quality of tives has fallen from 50 per problem”. challenges before. But he services that we offer.” cent, to a top rate of 28 per cent, “but the highest effective rate is actually 24.99 per cent Airport and offices are and only when you have an income exceeding £300,000, l after which it declines down to adding to the appea 5 per cent”. Two major developments are set to enhance Gibraltar’s Finance Centre appeal – a new airport Last year, Caruana began terminal that will shortly quadruple previous capacity, and a major speculatively built office the more aggressive sales pitch complex in a World Trade Centre (WTC) that is to progress next year. on Gibraltar’s strengths that The terminal, already twice delayed from an original March opening through problems with needed to be repeated this year a Spanish building contractor, is expected to be inaugurated in November. Peter Caruana, Chief to ensure the message was Minister, told his City audience in mid-October that it would be operational “in a matter of getting through to City finance weeks”. specialists. And in an exclusive statement on the availability of new office space, he separately told However, later at the Gibraltar International that “negotiations with a developer have successfully been concluded. Gibraltar Day evening Caruana added: “This agreement will avoid the need for the Government of Gibraltar to be Guildhall reception, Caruana [financially] involved in office development” as had been threatened if more office development told an audience of 1,100 that did not start soon to help financial services expansion. as a small country, having rid- Although not confirmed by WTC developer Ocean Village, Gibraltar International under- den out the financial dangers of stands that the 17,000 m2 project is now to go ahead. the last three years, “we (the INSURANCE

Continued from page 10 accepts that everything is much more open approach may have undesired long-term companies has not prompted any and disclosure is the way of the world.” effects, and in any case, the cost-benefit previously tax exempt insurance business Some in the wider Finance Centre case for DTAs has not been fully made. to take flight from the jurisdiction; indeed believe the UK government “is more There are now 63 licenced insurers of 10 per cent has become the benchmark for inclined” to accept Gibraltar piggybacking all types operating in Gibraltar, including Europe, because everyone accepts that tax on UK DTAs as part of negotiations with 15 captives, mostly being managed by the has to be paid wherever a business is based individual countries on a case-by-case seven insurance managers registered in the in the world.” basis. Others however, believe that jurisdiction Robus Risk Services is being formed as an insurance management company to launch at end 2011 and will have the Duo top Kilimanjaro for charity currently self-managed Gibraltar-based Drawing on business experience of team playing and support, 48 years old Liz Quinn, motor insurer, First Central, as its opening Quest Group financial director, and finance manager / client account handler, Kerry client at Ocean Village offices. Peters (46) walked to the top of Kilimanjaro, Africa’s highest mountain, to raise £23,400 for Cancer Relief and other local charities. Tax agreements With four to 13 hours marching each day through tropical forest, open moorland With one eye on Malta’s strong bid for and alpine desert, the intrepid insurance pair took seven days with a UK group of 19 to insurance business, Chris Johnson, the cover 77 kms and reach the 5,895 metres-high peak, where the breathable oxygen is Gibraltar Insurance Association chairman, less than half the amount common at sea level. along with other finance centre sectors, Quest staff helped raise money through dress-down days and breakfasts, while says there is a need for introduction of friends and clients pitched in with donations too. Training for the pair, included walks Double Taxation Agreements (DTAs) to up Gibraltar’s 423-metre high Mediterranean Steps – “on the last day we walked three assist Gibraltar’s international attraction. times that much, so it was nowhere near as strenuous and didn’t involve camping”, says As Johnson says: “There was a time Quinn. Peters, who always wanted to walk the Himalayas believes that as with when some in Gibraltar opposed DTAs on business “it’s always good to challenge yourself”. Now the women are planning a the grounds of client confidentiality, but charity 5-day husky sledging trip to Norway, with the full support of Quest Managing today with the advent of Tax Information Director, Steve Quinn. Exchange Agreements, just about everyone

18 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com MONEY Euro exchange rate to reach 1.30 – but not for another 15 years! “Overall, we believe Sterling/Euro exchange rate should be around the 1:1.30 level; over the next five years it will move towards 1.20”, declared Dr Andrew McLaughlin, Royal Bank of Scotland Group’s chief economist when he visited Gibraltar in October. He gave an insight to how Sterling/Euro exchange rates may play out at a Chamber of Commerce presentation on the UK and Eurozone economies and the impact locally on Euro exchange rates, as Ray Spencer discovered.

n Dr McLaughlin’s opin- produced a 1:1.35 result, from the last few years says ion the present exchange (some 20 per cent higher), otherwise.” rate (around 1:1.14 or but his ‘best guess’ was not He said: “I’ve been speak- Iless) undervalues Sterling before 2016. However, he ing to Gibraltar clients about and he explored ways of view- told Gibraltar International: what is happening economical- Dr Andrew McLaughlin ing how currency ‘fair value’ “Much rests on the UK govern- ly in the wider Euro Zone – might be measured. Examining ment dealing with the public many individuals and business- would have recovered after 18 it on a purchasing power / par- finances, and debt levels es have a keen interest in months or so of recession, this ity basis, it came out at 1:1.30, continuing to reduce rather the Euro area where they time it remained significantly while another more technical than rise. have financial and material lower. measure to reflect UK / “This position is in con- investments.” GDP was now climbing Euroland trade flow, pointed to trast with the Euro Zone; Noting that worldwide slowly – something that RBS a lower 1:1.20 level! particularly in whether it has “this is no ordinary recovery”, expects to continue until back Viewing the exchange rate the ability to achieve a political Dr McLaughlin demonstrated over a long run average, resolution. But the experience that while typically UK GDP Continued page 22 MONEY

Continued from page 20 were recapitalised and the UK the economic situation, it is a managed the situation better budget deficit was 10.3% of very difficult time to get solu- than they did!” to its former level in a little GDP early last year. tions through”, he observed. The political zeitgeist under 3 year’s time. Spain’s The position was further Without political union there pre-economic collapse in UK, recovery path to its pre-reces- influenced by the cut in UK would be more instability. Europe and the US was aimed sion level is expected to almost interest rates – from 5 to 0.5 We had seen “the terrible at lending as much as possible, mirror that of the UK, and per cent in just six months – effect of debt grown over time almost regardless of risk, par- thereafter to continue with and the Bank of England’s in the past 10 years – in ticularly to encourage home only moderate growth. £200m Quantitative Easing Germany and France (a stabili- ownership. “Many banks were The nature of recovery programme. ty and growth pact) was too unable to step aside and see however, was determined by But depreciation can strict… had everyone followed what else was happening in the the extent to which recession rebound and in Dr McLaughlin’s the rules, we would not be in economy”, he said. destroyed capacity; hence the opinion, “Eurozone countries the mess that we are now”, he Within Gibraltar, he was need for growth, and the suc- are unable to competitively maintained. pleased to see that “the cess of that policy. Highly depreciate”. The world’s market “is economy is growing steadily, leveraged countries were seek- There is an economic trying to see if there is some with a financial performance ing growth, while creditors paradox in Europe, he noted. political will to solve the issue and statistics on a scale that were looking to control infla- In the 17 EU countries, overall or not; to stop the Euro dying”, most of the rest of the world tion, Dr McLaughlin asserted. “the current account is in Dr McLaughlin observed. would envy”. Exchange rates were an balance, net debt to GDP is On the part banks had However, the general eco- important factor in determin- lower, growth rate is satisfact- played in the worldwide economic situation, in addition to ing the recovery path, he ory, and inflation is under nomic meltdown, he candidly higher borrowing costs, may pointed out. control”. But when disaggre- revealed: “In my view, the also mean banks’ appetite for Sterling’s depreciation, gated, areas of the EU are world problem is rooted in the lending on Gibraltar residential which began in early 2007, was vulnerable – such as Greece, economic imbalance between property is reduced. He influenced by weak demand and a cause for concern in countries and regions – macro warned: “I believe we are near and financial stress; Northern Spain. economic forces have been in the maximum the regulators Rock nationalised, UK entered “Any solution has to be play. It would have helped if will accept for property in this recession, RBS and Lloyds agreed by all countries, but given they [the banks] could have market.”

22 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com TOURISM

Club site – by developer Squarestone has suffered £50m hotel boost by 2014 funding delays of more than a year. – more to come A spokesman refused to Now that an agreement has been reached to renovate the iconic 4-star comment on the continuing lack of progress. Rock Hotel and the Lester Hotel has resolved its financing issues the In the meantime, BGI’s two major Gibraltar hotel projects costing around £50m in total will go Perez remarked: “Much of the ahead with completion expected by 2014. But a proposed Hilton Hotel Rock Hotel’s progress depends on the success of the new is still unsecured, Ray Spencer reveals. airport terminal, which he decision by Bland added, in work that should 2012, with the hotel opening demonstrates Gibraltar is fit Group International start later this year. two years later having 150 for purpose, and marketing of (BGI) late in “When you consider the bedrooms and suites, 12 the destination to business and TSeptember, ends more history of the Rock Hotel, the executive boardrooms, a gym, tourists.” than two year’s speculation on brand itself and its reputation, bistro, bar and business The Hotel is one of four whether it would improve the there was an overwhelming centre. main activities for BGI, the existing Rock Hotel, demolish business case to stay put”, Interestingly, Lester international (non-UK) arm of it and rebuild as part of a said John Perez, BGI added: “We have secured Bland Group, which also larger project, or relocate to a chairman. firm interest from Holiday owned GB Airways before its new site. Although the £25m Inn and The Hilton Group £103m sale to easyJet in 2007. All 104 of the hotel’s sea- airport budget Lester hotel is should we wish to proceed BGI has also just secured facing rooms, restaurant and around 6 months behind with either of them on renewal of its airport handling catering facilities in the 79 schedule “due to funding branding the hotel.” contract for up to 14 flights a years old building (the work delays”, that issue is now However, another Hilton day for the next seven years in of the Marquis of Bute) are to being finalised, Simon Lester, Hotel project - a £45m, a competitive bid through be upgraded, and a new Group Chairman told me. 200-bed, 5-star hotel at the GibAir, which has fulfilled the gymnasium and ‘wellness’ spa Building starts in early former Royal Gibraltar Yacht role since 1947.

24 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com BUSINESS

Legal Year Opens in he was pleased to welcome Secretariat in assisting a Member of the House of Gibraltar - 2011 Kristian onto the Board of regulatory development in a Lords. Chairman of the Gibraltar Bar Directors, after having number of Commonwealth In September 2011, Council and senior partner at mentored and evidenced his countries. Parliament called for him to be Hassans International Law rapid conferred with the Honorary Firm, David Dumas QC progression Freedom of the City of delivered his address to the within the firm. Gibraltar and also the Gibraltar Supreme Court in September. It Barry Medallion of Honour. was part of the ceremonial Pillans, He has supported opening of the Legal Year for Assurance successive Chief Ministers of 2011. Leader, said Gibraltar and maintains strong Present at the proceedings that Kristian is links with the Jewish L to R – Colin Vaughan, Kristian Menez and Barry Pillans were a number of distinguished hard working Community in Gibraltar. guests including the Governor, and highly technical. He was educated at St Sir Adrian Johns, the Minister Kristian joins a team of ...meanwhile at the Paul’s School in London, and for Justice, Daniel Feetham, over 110 highly qualified Kenyan Insurance later attended Trinity Hall, Regulatory Authority... himself previously a partner at professionals. Cambridge, where he was Hassans, and the Leader of the www.pwc.gi The Deputy Chief Executive President of the Cambridge Opposition, Fabian Picardo, still Officer of the Financial Services Union and Chairman of the a partner at Hassans. Commonwealth Commission, David Parody, Cambridge Union Labour Club. Regulatory Workshop visited Mombasa, Kenya, where He was also President of Trinity Trinidad he delivered a workshop for the Hall’s Athletic Club. Marcus Killick, Chief Board of the Kenyan Insurance He then went on to obtain Executive Officer of the Regulatory Authority (KIRA) a Fulbright and Smith-Mundt Gibraltar Financial Services funded by the KIRA itself. scholarship to Harvard Law Commission, has recently The workshop aimed to School. He was called to the bar in 1954 and was appointed Queen’s Counsel in 1971. Business He was President of the Board of Deputies of British David Dumas QC Jews from 1978 to 1984, and has been a key international David is a respected ROUND UP figure in efforts to seek litigator. He graduated from compensation and restitution Exeter College, Oxford for Holocaust victims. University and read for the Bar returned from the identify the strategic objectives Finals at the Inns of Court Commonwealth Secretariat for the KIRA as part of UK’s Computacenter School of Law in London. He “Commonwealth Regulatory strengthening the Corporate opens in Gibraltar was called to the Bars of Workshop” in Trinidad. Governance of the Authority in UK Based Computacenter, one England & Wales and Gibraltar, He was invited by the line with the Kenyan of Europe’s leading providers of in 1981. Secretariat to address the Government's requirements for IT infrastructure services, has David joined Hassans in workshop on the Governance greater accountability of the opened an office in Gibraltar. 1981, becoming a partner in of International Regulation public sector. 1987, and was appointed with a paper entitled, “The The FSC is keen to share Queen's Counsel in 2002. Financial Crisis - Impacts for it's own experiences and www.gibraltarlaw.com regulators of small practices as part of it's jurisdictions”. continued regulatory PWC Appointment Other speakers at the cooperation with fellow PricewaterhouseCoopers event included the Governors regulators across the world. Limited (PwC) have promoted of the Central Bank of Founded in 1981, Kristian Menez to the position Trinidad and Tobago and the Freedom of the City Computacenter has over 10,000 of Director. Central Bank of Barbados, as to Lord Janner employees across Europe with a Kristian joined the firm in well as representatives from Lord Greville Janner has been a £2.7bn annual turnover and October 2003 after training and the Financial Stability Board, friend to the people of Gibraltar supporting over 2000 qualifying as a Chartered OECD, World Bank and FATF. throughout his time in public customers. Accountant in the UK. The presentation was part life in the UK, both as a Marc Fryer, Colin Vaughan, Senior of the Commission's work Member of the House of Computacenter’s Client Director Partner of PwC Gibraltar said with the Commonwealth Commons and most recently as Continued page 28

26 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com BUSINESS An oasis... HILL INSURANCE COMPANY LIMITED Continued from page 26 Fiduciary Management for the Corporate & eGaming Appoints New MD Sector says, “Gibraltar Fiduciary Management Limited, continues to attract the best in the Gibraltar based financial class gaming companies across services provider, has appointed the world. We have invested in Steve Grainger as Managing Gibraltar to offer the support Director. these companies need and Steve worked for 20 years deserve. Computacenter is a in The Cayman Islands, The in a busy world respected and pan Bahamas, Channel European IT Islands and Bermuda bedrooms Infrastructure with an emphasis on 104 Bedrooms and suites in a colonial Services and the management and style all with a sea view Solutions provider delivery of quality conference facilities with a history of service to Ultra High Full upgraded conference facilities dealing with some of Net Worth available for board meetings, training the largest public and individuals. Steve will courses and presentations private organisations lead and manage the Internet globally.” Steve Grainger very experienced FREE Wireless broadband available The launch Company throughout the hotel and an internet event began with an eGaming Management, Trust, Marine room for our guests to use Seminar hosted by Marc Fryer Services and Fund weddings with key executives from Cisco, Administration teams within The Rock is an ideal wedding venue EMC and VMware in Fiduciary. whether it be a small intimate wedding attendance. www.fiduciarygroup.com or large family gathering. We are also a recognised venue for civil marriages www.computacenter.com and ceremonies can now be conducted InvestGibraltar Becomes in various parts of the hotel Sapphire Bronze Cup SFEDI Centre of Excellence Swimming Pool “The 40th BMW International Outdoor swimming pool with pool Polo Tournament organised by The InvestGibraltar Office, side bar and pool side menu. We Santa Maria Polo Club this Gibraltar’s one stop shop for welcome private pool membership, summer attracted an ‘A’ list of business, has become the first our lido club, with private pool hire for parties and barbecues international sponsors and Small Firms Enterprise We operate under Freedom to Provide Services in followers. Gibraltar’s Sapphire Development Initiative (SFEDI) Restaurant l UNITED KINGDOM Networks lined up alongside Centre of Excellence to be l The restaurant has stunning views Isolas, Fiduciary and Europort approved outside of England, ITALY over the bay. Our “house” menu is l excellent value for three courses to sponsor The Bronze Cup - Ireland and Wales. FRANCE including an aperitif Manzanilla, which was won this year by Las SFEDI is the Government l BULGARIA olives and coffee. A full á la carte Monjitas. The Sapphire recognised UK Standards menu along with a superb eclectic We have a network of over 200 brokers wine list is also available Networks own Polo team is Setting Body for Business also becoming a regular name Support and Business wisteria terrace on the polo calendar. Earlier Enterprise. Run by The Wisteria Terrace for lunches, HILL INSURANCE activity focuses on SURETY AND BOND, this year, in only their second entrepreneurs for entrepreneurs, dinner, barbecues, afternoon teas, evening drinks and informal dining SFEDI researches AVIATION AND ASSISTANCE: leading practice, sets Barbary bar our goal is to provide our clients with quick and functional solutions that allow them to standards, principles Barbary Bar and terrace for a make the most of the market opportunities relaxing drink and for the wine and guidelines. buff, a choice of nine wines by Jenny Pears, the glass Business Lounges Development To find out more please contact us at Take a good old fashioned English Manager for SFEDI tea in one of the spacious lounges says, “Becoming [email protected] Spectators at the polo event SFEDI accredited or visit our website season, they won the prestigious proves to your clients that you www.hillinsurance.eu XXXII Memorial José Ignacio have achieved a nationally Domecq, which is ranked in the recognised standard of Europa Road, Gibraltar World Polo Tour for the excellence in advising Tel: +350 200 73000 Challenge Cup category.” businesses”. Fax: +350 200 73513 HILL INSURANCE COMPANY LIMITED E-mail: [email protected] www.sapphire.gi www.investgibraltar.gov.gi www.rockhotelgibraltar.com Unit 1A, Ground Floor Grand Ocean Plaza Ocean Village - Gibraltar 28 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com Tel/Fax +350 200 62407 CONTACTS Professional Bodies based in Gibraltar Association of Pension Fund Administrators (APFA) Gibraltar Finance Centre Council (GFCC) Steven Knight, Chairman, Tel: + (350) 200 40466 Kerry Blight, Chairman, Tel: + (350) 2000 4000 Email: [email protected] Email: [email protected] Association of Trust & Company Managers (ATCOM) Gibraltar Federation of Small Business (GFSB) Marc X. Ellul, Chairman, Tel: + (350) 200 70921 Stuart Rodriguez, Chairman, Tel: + (350) 200 47722 Email: [email protected] Email: [email protected] Gibraltar Funds & Investments Association (GFIA) Bar Council Adrian Hogg, Chairman, Tel: + (350) 200 45502 David Dumas, Chairman, Tel: + (350) 200 59026 / 79075 Email: [email protected] Email: [email protected] [email protected] Gibraltar Insurance Association (GIA) Gibraltar Association of Compliance Officers (GACO) Chris Johnson, Chairman, Tel: + (350) 58452000 Ivan Perez, Chairman, Tel: + (350) 200 73520 Gibraltar Insurance Institute (GII) Email: [email protected] Andy Baker, President, Tel: + (350) 200 79520 Gibraltar Bankers’ Association (GBA) Email: [email protected] Emma Perez, President, Tel: + (350) 2000 2000 Gibraltar Society of Accountants (GSA) Email: [email protected] Freddie White, President, Tel: + (350) 200 45502 Gibraltar Betting & Gaming Association (GBGA) Email: [email protected] Freddie Ballester, Chairman, Tel: + (350) 200 40595 Society of Trust & Estate Practitioners (STEP) Email: [email protected] Peter Isola, Chairman, Tel: + (350) 2000 1892 Email: [email protected] Gibraltar Chamber of Commerce (GCC) Gibraltar HR Forum Nicholas Russo, President, Tel: + (350) 200 78376 Ruth Halsall, Chair, Tel: + (350) 200 43865 Email: [email protected] Email: [email protected]

30 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

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